Capacity Cost Is

question 20

Multiple Choice

Capacity cost is

• A)only an inventoriable cost.
• B)only a period cost.
• C)never amortized.
• D)a variable manufacturing overhead cost.
• E)a fixed manufacturing overhead cost.

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Definitions:

Inferior Good

A type of good whose demand decreases as the income of consumers increases, inverse to normal goods.

Consumer Incomes

The total earnings received by consumers, including wages, salaries, benefits, and other income sources, which affect their purchasing power.

Farm Income

The earnings from agricultural operations, including the sale of crops, livestock, and other farm-related sources.

Farm Household

A living arrangement where families live and work primarily on a farm producing agricultural goods.